Transcripts For BLOOMBERG The Pulse 20141114

Good morning, everybody. You are watching the pulse. I am guy johnson. Im francine lacqua. We are getting breaking news out of italy. The a thailand economy shrank 0. 1 in the the Italian Economy shrank 0. 1 in the Third Quarter. Countrystory of a struggling to grow. Another recession, here we come. Difficult times for matteo renzi. He tries to figure out exactly what he needs to do to get this story flowing again. Lets go north and talk about where else we are seeing growth or no growth. Half of the euro zone economy, journey germany and france. Not great numbers from either in the Third Quarter. We had updates from the netherlands. Before we get the aggregated number, international correspondent, hans nichols, in berlin. We know a lot of the pieces. And we can deed is from the pieces. The aggregate number is going to come in line with expectations right about 0. 1 growth. Italy looks worth remembering. This is the 13th quarter with negative or zero growth. It is a negative run. We did get some positive numbers out of france on the upside. They came in at 0. 3 . Outputey had negative last quarter. When you look at the german numbers as well, they were positive and they revised upward last quarter, but you look at what drove the German Economy, it was consumer spending, which is a little bit. We have in trying to reconcile all this confusing data out of germany. We may have the beginnings of a final answer. Those numbers continue to be negative for the last six months. Business is less optimistic than the consumer in germany. We do have some positive estimates on how much germans are going to spend on christmas shopping. I think it is 50 euros more this year than last year or so south of 500 euros. When you compare it to the u. S. Or u. K. , much less on consumer spending. Overall, these numbers are not asterisk this is going to cause Difficult Conversations in brisbane. This will be on angela merkel. What can she do to maybe stimulate growth . A lot of pressure coming from the g20. Thanks very much indeed. Leaders from the g20 nations have been arriving in brisbane ahead of this weekends summit. Paul allen is at the venue. Global Economic Growth is top of the agenda. What are the chances of actually talking about new targets and achieving the ones set last time . Im sure they will talk about it, francine. That is what the skeptics often say. There is a great deal of talking but when the rubber meets the road, not a huge amount of action. The australian treasurer is promising that this time it is different. He was proud of the fact that out of the finance ministers meeting in sydney, they got a solid agreement to work on raising Global Growth by two Percentage Points. That adds 2 trillion to the Global Economy. As well as cracking down on tax avoidance and corruption. When the leaders get home, they do have to implement it. It is often difficult to get this things underway. We havent even started yet. The summit begins tomorrow. General spoke to bloomberg. Here is what he had to say. We are in a very sluggish economy. A bright,ct of recovery inth and the mediumlongterm are not there. We really should make it happen. I believe that it is possible that the ground has been prepared here in brisbane. The g20 leaders are trying to stimulate the local economy. 100 million has been spent on security alone. It is difficult to turn a corner without bumping into them. The government has spent 1. 8 million on limousines to ferry the leaders around. Is a heavy security presence here in brisbane. Back to you. Thank you so much, paul allen in brisbane. He will be joining us throughout the morning. The price of Oil Continues to drop. Rent crude now at a fouryear low. The iea has reached a gloomy report highlighting the impact of weakening demand and the strong dollar. Our next guest used to contribute to these reports when he worked for the iea. We are joined by the bnp paribas head of Commodity Markets and strategy, a long title. I know. [laughter] harry. I go by harry t. You sound like a rapper. I dont have the gold though. We can work on that. Lets talk a little bit about the report. As expected,ly it is pretty gloomy. Not so much of a surprise. Iea had already revised downwards in its previous two reports. I think this report is really highlighting the pressures that are building on opec. In particular, in saudi arabia. Saudi has been cryptic in terms of what it intends to do a head the opec november meeting. Obviously everyone is on edge. We are starting to see the longest losing streak since 1986. Are we going to see a shock . That is an interesting question. The Analyst Community is divided in terms of what happens next. It is a binary outcome. Be facetious in saying prices either go up or down. What i mean is that they stay it cant stay at the level it is right now. The divide is whether opec will do something or not. Some people believe that opec wont do anything and will let the price decline. In our opinion, wasting cash reserves, running deficits to shut down u. S. Shale production is futile. Can opec take the pain of having to try to develop this scenario for a period of a year if not more . Our belief is not. They will have to cut and we expect them to do somewhere between one million to 1. 5 Million Barrels a day. The internal politics is interesting as well. Whether the producers say, we are just going to reduce production or others are being forced in as well. That is the crux of the matter. The reason the saudis have been delaying their attentions is they dont want to be the only ones to cut production. In essence, the longer the price remains where it is, the more you incentivize other opec producers to join in. What saudi wants is collective action. It will be most more forceful on the market. One possible scenario for a cut would be saudi cutting maybe 500,000 barrels a day. Would be spread out over the remainder of opec. That is a plausible scenario. The whole thing is that saudi does not want to be the sole producer to adjust. Even if it is, it wont have a choice but to adjust. It is a game of chicken, really. In essence, most opec countries are going to be fiscally challenged by this price environment. According to surveys, you have a rough consensus at below 100. All of opec is fiscally challenged. Is that really true . It depends how you come to the price estimate. There is a bit of variability as to what the price level is. So a lot of people argue that while they are prepared to live with lower oil prices, they could run deficits, but in the end, why burn your cash reserves in a futile attempt to bring down u. S. Shale Oil Production . What would a Million Barrels out of the market due to the price . Hopefully it will bounce back. I think we could gain within the next two to three weeks at least five dollars, six dollars, and see if we could aim higher and get brent back closer to 90. I think if they dont do anything, the potential for the downside is even greater. Believesence, if you they do nothing, it is a good time to start buying puts on oil and even put spreads. Otherwise, you are looking at a volatility game. The prices go either way. This is where it becomes interesting. Opec have never said what kind of price of oil they are targeting. 90 seems the fair option . It is a shifting target. Every time the price goes up, opec seems to say that is a fair price. The latest official pronouncements were 100. A couple months ago, in bahrain, saudi officials said 90 was more like the floor. That ande are below that is a reasonable target. How tight is the v on the straddle . The risk is asymmetric. I think if nothing happens, prices could move lower quicker. But the straddle is really playing a binary outcome. You do expect the price to move. What saudi and opec does or doesnt do, the price has to move in one direction or another. That is interesting, looking at the price and implied volatility. What you are saying intimates that once they cut a million, they have to continue cutting. Absolutely. Depending on your forecast and your assumption on supply and demand, how far is opec production from the call on opec oil, the amount of oil opec must produce to have zero changes in price . Currently, they are above that level for the Fourth Quarter by 700 barrels 700,000 barrels a day. One Million Barrels a day in the First Quarter of next year . You need at least an initial Million Barrels a day cut so that markets are reassured they are acting, and potentially add to that. All right, thank you so much for all of that. Harry t. To his friends. Thats move on and find out what else is on our radar. The investigator who led the probe into the world cup said the decision is to keep russia and qatar as hosts. Summary released yesterday includes incomplete and erroneous interpretations. Earlier this month, emirates became the first major sponsor to drop fifa. Twitter shares fell nearly 6 after Standard Poors gave the company a Credit Rating of double d. That is three levels below investment grade. S p said that twitters financial risk was significant. Twitter has been under pressure because of slowing user growth and management turnover. Alibaba is trying to raise a billion dollars in its third u. S. Bond sale. They say the sale could take place as soon as next week. The Worlds Largest Ecommerce Company will use the proceeds to refinance its credit facilities. Coming, cautious about christmas. We will get the asda ceos views. That is an exclusive interview. A new report shows that only one in 10 hr leaders think that email during meetings is acceptable. If you have ever been to a meeting with francine lacqua, you will know who started the trend. If you want to join in this conversation, should you be able to email during we forgot. If you want to join in the conversation. Dont do this in a meeting. Welcome back. I think we should say it together. I will carry on. Thank you. This is the pulse. We are on the radio. And we are streaming on bloomberg. Com. We are even on your phone. We have everything covered. The battle between british retailers continues to rage says the ceo of one of the u. K. s biggest players. We sat down for an exclusive interview with andy clark. He gave us his perspective on the future of the industry. Shortterm have some drive traffic, but as we said earlier on to day, it is a form of quantitative easing. At some point, you have to change. Printing five pound vouchers is a shortterm proposition. Somebody has to pay for it. What do you feel like about the u. K. Economy . Are things going to improve . The economy is in a growth position. That is good to see. Customers see the u. K. Starting to have green shoes of recovery. Unemployment levels are at an alltime low. It is good for the country, good for the economy. Perspective, back to one of your earlier points, there are businesses that will win and businesses that will lose. I huge piece of change next year with a general election. Publict the general will vote with their feet in terms of which way they want to go. We will see how the economy continues. European Business Correspondent Caroline Hyde is here with more now. Caroline, great to have you here. He was talking about challenges in the runup to christmas. Exactly, it is not going to get any easier. The bigthe only one of four players managing to increase market share. It is still seeing like for like shares down 6 . He says the battle continues to rage. He called the last quarter a shock wave to the industry. He said he they got it right to years ago. They cut prices. They have seen copycats since then. You have seen morrisons, sainsburys as well. He really talks about the tactics being used by the other players. Morrisons giving a five pound voucher for fruits and vegetables, he says that is panic tactics. In the longterm, that is not going to win anything. Quantitative easing, that is not the longterm strategy. Price,etting the right being able to fight against the discounters that are coming in. Also, trying to focus on new innovations, trying to draw in the audience. What does he think happens next . He talks about the fact that tesco, we are waiting to see what they will deliver. The operating environment to get worse . I think so. Says there wont be for big players in 5, 10 years time. He thinks some of the players will die over the next five to 10 years. You are not focused on trust and consistency and loyalty exactly. Overall, he is saying the economy is improving but it is not making shoppers spend. Caroline, thank you so much. Great interview with Caroline Hyde speaking to the asda ceo exclusively. Bugatti plans to take on luxury goods. Would you have a bugatti handbag . We are going to hear from the boss of this business. He is joining us after the break. Welcome back, everyone. You are watching the pulse. We are on the markets and we are on swiss watch. A taking story. Jon ferro, over to you. You have to wait for that. I am going to start with the equity markets first. Im standing on unchanged moves in the dax. The ftse 100 down by 0. 2 . Let me give you three big headlines. Germany avoids recession. The bar is low for france, they did not trip. Italy, the economy contracts again. The last time the economy delivered any growth was back in 2011. Last 13 quarters, the economy has contracted. That tells you how good or not good things are in europe. Eurodollar, people trimming their calls for next year. 1. 15 against the euro next year. Right now, this is what im watching, the euro i guess the swiss franc. Dropped to 1. 20 this morning. Lower ishis one any like putting your hand in a blender. I dont know what is going on in europe but i am glued to that charge. Like putting your hand in a blender. It can be very messy. Ining up, from the iphone your pocket to your personnel uber driver, we will talk about how the United States put germany in this years soft power service. Will come back to the pulse im francine lacqua. A slow recovery has taken hold in the region. The German Economy narrowly avoided recession and thirdquarter gdp rose 0. 1 while the French Economy grew better than expected. Global Economic Growth will be at the top of the agenda in the g20 summit. Leaders have been arriving in brisbane ahead of the talks. Russia, ukraine, that is a story. Tax will also be a feature. British Prime Minister David Cameron has announced legislation intended to stop Islamic State is streaming from returning extremists from returning to britain. Authorities would be allowed to seize passports of people suspected of planning to travel to syria or iraq to fight. Company news, airbus reported thirdquarter results. The aircraft manufacturer beat profit estimates. Joining us with more is caroline con on. What do you make of the numbers . Good morning, francine. The Third Quarter Beat Estimates for airbus. They had 821 Million Euros of profit outside of interest tax. One thing analysts are looking at is the positive cash flow they generated this quarter, 180 Million Euros when they had negative cash flow last year. That is pretty positive. Shares reacting well this morning. What happened in the Third Quarter is they delivered higher value planes including the a3 80, the biggest airplane on the market. At 414ne is priced million. For the rest of 2014, they are that revenue will be stable compared to last year. Shouldy their deliveries also be at the same level as 626 when they delivered planes. However, net orders will be higher than these deliveries. Already, they have net orders of nearly 800 aircraft in the first nine months of the year. Especially coming from the new neo, their bestselling aircraft so far. They had just this month a 10 billion order from china and a 25 billion order last month from india. What are the main challenges for airbus Going Forward . If you look at the shares this morning, they are rising. Since the beginning of the year, they have lost nearly 15 . There are some challenges. They have to deliver their next generation of aircraft. 50. Upcoming one is the a3 they are set to deliver the first two Qatar Airways by next month. There has been some delay. The head of airbus this morning said that the Program Remains challenging and you have the Defense Division cutting 6000 jobs and having some delays as well on the military plane. Caroline, on a completely different story, but it has a little bit of excitement just outside paris, where are we with the tiger search . Know, a tiger has been loose in the suburbs of paris, near disneyland. Is still going on at the moment. The latest is that the tiger may have been seen at a gas station near a highway going from paris to police are advising drivers on this highway to drive very carefully. They are advising people who live in the area to remain at and not go by foot or go in the forest. There is a big forest near this highway where the hunt may get trickier. Caroline, thank you so much. Amazing story. He got out of a circus and we heard from the circus master yesterday, at some point he will get hungry. Please stay inside. If you see the tiger, dont move. That was the main point. On the have an update tiger situation through the morning. [laughter] sorry, im just laughing at this. Lets go from the fast lane to the runway. Road, mayben that bugatti is the car to be driving. Bugatti is changing its spot. Nowt it was a car company, it is becoming a lifestyle company. It expands its reach beyond the original brand. It is getting into handbags. I caught up with the president of the company for an exclusive interview. I started by asking him about how the idea of expanding into luxury lifestyle came about. Idea that could be developed out of bugatti was also the idea that came up in our board of management and had been influenced by the supervisory board. These people that guide these big companies, that are in the chairs of very important car companies, they have visions. They are around in very elite places and they have contact to very special combat ors special customers. Did they come to you . We tried to talk to each other quite frequently. We tried to spend as much time flights from the u. S. This is when we talk about this subject. Who are the customers for bugatti lifestyle . Are they different from the car customers . All, we thought about giving something very special, a very special treatment to our customers. Right now we have about 440. 10 cars are still to be sold in the future. These customers are the most exclusive customers around the world. They are real achievers in life. What you need to have is a very good offering, something very special that they go for. This is the reason why we have one collection out of our two collections that is only available to our customers. You have to buy a car to buy the bag. Or the other way around. Market in terms of the developing forward, which markets are still healthy . Which markets are slowing down . I would be curious about your view of the world right now. The reason we are here in london is no metropolitan area around the world sold more bugattis than london. On a lot of our customers are based in london or have offices or have Parking Spaces where they can deposit this car. We think this is the right location to open a store. Our customers, when we talk about the bugatti, are divided into three regions. Very important of course is europe. Especially great britain, germany and switzerland. Then we see u. S. As one third of the market and the middle east. We are already starting to sell bugattis in china. Howdy you think the Chinese Market is going to develop . The Chinese Market cannot be neglected. Market the spirit in the and the behavioral structure of the customers is on the same way as it is in very developed regions around the world where exclusive products have a great demand on peoples purchasing behavior. We see a Bright Future also for bugatti in china. One final question. You talk fairly positively about the brand. We have a lifestyle story being developed. What does it look like when you start doing Something Like this . Do the margins improve, do they go down . There must be a baseline benefit for you. Sure that ourely boutique idea that we are following up around the world, you will see around 30 more exclusive boutiques like those around the metropolitan areas in the next five years. This will of course pay into our pocket. The way he says, if you want a bugatti, you can buy the jacket but if you want the jacket, you have to buy the bugatti. That is not the question to my mind. Would you spend your money on a bugatti handbag . A handbag, the quick answer is no. The longer answer is, lets see what they have coming up. But the initial reaction probably neither. Luxury is all about a brand that you associate yourself with. Would you get a jacket, a bugatti jacket . You see, it is just a question of lifestyle. I wouldnt be associated with that brand. Ok. I think will will leave that one alone. Fascinating story after the break. A company developing nano chips. This is fascinating tech. Stay tuned to find out more about it. Welcome back. You are watching the pulse. A smartphone sized breathalyzer that can detect cancer could be on the market within one to two years. That is according to the British Company which has developed the device by adapting military great nano chips. Tom mckinsey reports. 9 11e tragic events of proved a powerful catalyst for many global firms focused on security. That included a small tech firm in cambridge. They won a lucrative deal to supply the u. S. Military with highend nano chips to detect poison gas on the battlefield. Now, those chips are being retooled to help fight disease. It is a decision fueled by the tone personal story of owls cofounder billy boyle. Late wife was diagnosed and if she had been diagnosed earlier, her chances would have been much higher. Owlstone say their chips which can be programmed to smell disease could monitor breath to dramatically increase diagnosis and potentially save millions of lives. Chemicals in breath can be telltale markers for disease. Brett is a great noninvasive way to do diagnosis. Hasne of the key challenges been to design a machine small enough and cheap enough for everyday use. We are trying to shrink that functionality down into a device which you can use on the battlefield but also in the doctors office. With enough funding, owlstone thinks it can get its cancer detecting breathalyzers on the market and into your home within two years. Tom mckenzie, bloomberg. For more on this story and a broader look at what is happening in the tech sector, we are joined by michael king. He is the chairman of future Technology Portfolio. Good morning. One great company, plenty of other Good Companies out there doing things that have a meaningful impact on peoples lives. We spend a lot of time talking about tech and we end up talking about apps. You come from a different perspective. I couldnt agree with you more. We doall about, what can with this . Lets stop talking and start doing. It is one of those Inflection Point in world of element. We are being driven by population growth. We have enormous pressure on resources. If you look at owlstone, one of the great pressures we have is on health care. Health care costs vast amounts of money. The developing world is becoming wealthier. What is one of the things people look for they look for more advanced health care. If the developing world adopts the western model, their economies are going to collapse because they cant afford it. We can barely afford it. We get into prevention rather than cure. This is a real world application which allows you to detect earlier and have a greater chance of prevention. You can lower the cost of treatment. I dont think anyone puts in question the fact that we want to prevent. It is about having the technology to do that. What can we really tackle it efficiently in terms of prevention . Where are we at this point . What has to be at the start of this is collection of information. Cantt information, we have knowledge. Without knowledge, we cant act. That is what they are doing. With this chip and the software the softwareh it, is the analysis, that is what gives you the ability to act. They are working in tandem with the medical communities, telling them what to look for. It is a perfect combination. ,he future Technology Portfolio our partners revised that portfolio. These are exactly the sorts of technologies we are looking for. Mike lynch was here yesterday. He has a fairly big fund. He was talking about the same thing. Traditionally, we thought about medical research as being Drug Development and we thought about technology as being something completely different. To venn diagram is going overlap significantly and generate new opportunity driven by data and medical research. How big does this space become . Where are the real opportunities within that overlap . I think it is an enormous market. If you take owlstone as the example, where does this Technology Come from . They started with something else. That is what is so interesting. Of onehe Application Technology in another area, spreading the net of applications. Talking about applications downloaded to your mobile phone. Much realare very World Solutions to be found here. Some of the other companies we are looking to invest in, and have invested in i was reading an article today on the subject of food wastage in india. 40 of Fresh Produce in india goes to waste. Why is that . We have a chill chain in the United States and the western world. You can have that there because the road network doesnt work. We have a company which turns waste heat into chill water. It takes exhaust from a Diesel Engine and we repurpose it. We turn it into chilled water, which is the basis of refrigeration. Generatorhas a diesel , which is only 25 efficient. You are wasting 75 of the energy. And create ae that benefit at no extra cost. That is enormously powerful. That is not an app. That is something which makes a difference. Why do we hear about it last . It is not cool. You think it is just a factor of coolness . You talk about preventing or diagnosing cancer before a doctor can that is cool. That sort of thing is cool. But when we talk about doing things which will help the poorest in society, think about what is possible today. It is quite possible for technology to have a ly largertionate effect on the poorest in society. Take the mobile phone. Fish, you brought it to the same place. Somebody else has got his boat in their two hours before you. Not going to sell the catch. No you have a mobile phone. You can find out where there is a market for your fish. It are for you, better for the market. Did somebody think about that . Of course they did. It is a natural effect of that. Did we think about the effect of providing cold storage in india or africa when we were designing these technologies . We didnt. That when you start to think about the applications, then it is absolutely there. Is lateral thinking and imagination that goes into this. We intend to make this much more known. There is a lot we can do. Thank you, michael keane. Coming up next, can the European Space agency keep it together . It is in the shadows. Reach to recharge the batteries. Stay tuned to find out. Welcome back. It is time for todays new energy top headlines. A Chinese Renewable Energy developer has raised 44 million. The Hong Kongbased company twice delayed listing in the u. S. That was after failing to raise an initial target of 150 million. A top u. S. Energy storage vendor. The company mainly produces vehicle batteries in california. It is set to have 50 megawatt hours of Battery Storage online for use in power by the end of 2014. Comet complication. The first images emerge from the where awhere the comet robotic spacecraft landed. The photo shows the lander located in the shadows of a cliff. Says this may complicate the operation of solar panels. For those listening on bloomberg radio, the first word is up next. For our viewers, it is a second hour of the pulse. It is going to be a really packed show. We go through growth or no growth in europe. We will be talking about that and the risk of deflation with the jefferies chief economist. Then, the man of the hour. We speak to tyler brule. We are talking about soft power. You dont need a warship for this. You need an ipod. We will be back. See you in a moment. Touchdown in brisbane. Abae has landed. The World Economy is in its worst shape in two years. More evidence of that. Eurozone gdp is out. 20 is the economic number. Why football and food means europe wields massive global influence. Clicks good morning to our viewers in europe. I am guy johnson. This is the pulse. This is the first flash number. The other big number is recession. The big surprises everybody seems to be treating the slightly better data we have seen as a victory. That is despite the number coming through at. 20. The market position for negative use, you have seen the euro rally. We are not seeing a great deal of reaction at the moment. We previously had the french and german numbers out. We will be slightly ahead of the forecast as a result of that. Lets talk to our international correspondent. The numbers are good. They have beat expectations. We have portugal. They were expected to come in at positive. 4 . They came in at positive. 2 . France, better than expected. Germany spot online. Here is my negativity. The German Growth was consumer spending. When you look at consumer spending, it is unclear if consumers are going to feel confident. Given the mindset here, when you look at business confidence, it is on the way down. Numbers. Ositive 0. 2 for the entire euro zone. Not a whole lot sustaining it. Lews comments may be weighing on some minds in brisbane as the g20 gathers in australia. Thank you very much. Our international correspondent. I do not think we need the u. S. Reminder. Europe already knew. I take these things personally sometimes. Two largesturopes economies. We are joined by a guest to says italy will be the wildcard. David owen is here. It is about pushing for reforms. There will never be stellar figures. Unemployment is high. It is waiting on the italian data. It is in line. The eurozone is flatlining. Strip away images. Maybe they do not do anything more in december. They kick off the Program Next Week and we go from there. At the same time, they know the eurozone is not recovering. It is more flatlining. A if the ecb sees this is good number, it is pretty low. Over there thinking next three years. The abs program will not be hugely big. What they are hoping is the market develops. Structural reforms will be negative for gdp. Negative french gdp growth initially. Reforms bear fruit. We saw that in the u k. It takes years. Not worried, are even if we are seeing more of a slump than expected because the reforms are they are. Are there. At least the eurozone is not back in recession. [indiscernible] we will be seeing what portion of the basket is overall deflation. We are seeing disinflation across the piece. The proper gains for the ecb is not that the ecb is in recession. They are facing ongoing forces. Nary they need a Weaker Exchange rate. How do you derive that . Trade globally is weak. The eurozone is so open it is almost as open as the u. K. , but it is as big as the u. S. Rate really matters here. Risksrall you think the are to the downside. It is flatlining. Could we see deflationary pressure . More countries are stocking around zero inflation. Week real gdp and no inflation. Issue forother markets. Talk to me about how much the ecb is going to have to downgrade numbers when we get the december stock. If they are lucky, they will get growth next year. The inflation forecast will get nudged down. To be hugely revised. The interesting thing yesterday, ecb released the forecasters poll. Mario draghi can reference it. Expectations in the poll declined. To 1. 8. Inflation is going to be back at target on a longterm horizon. Broadly, we seem to be back from the brink. Because of the deflationary , is that likely to put us back in the spotlight . Germany is disappointing. The other thing is we have massive in a way gdp is measured. For the eurozone, lets put this in context. For the eurozone, it is more like we are flatlining. Service costs in some countries are going up even though Interest Rates go down. Aware of these issues. The key thing is to get the Exchange Rate down. Given the story that surrounds that, is the market mispricing . For example, investors are questioning the likely Earnings Growth. Particularly, if they moved to our right, the spread has come in further. Ashow can germany be priced the same it comes at a 75 over. The whole thing tightens up. You have no nominal Earnings Growth. That is another issue for investors. To get theing earnings being hind it, so that matters. I think what mario draghi is trying to see through forcing investors at a fixed income is to develop a culture. You need the Earnings Growth to justify that. You need normal gdp growth. Bonds for my grandmother for christmas. That is what you want on christmas. Absolutely. The issue here is you do not have grew the companys head. Future,future in the it could be a. Thank you so much. David owen. Nations have been arriving in the australian city of brisbane for the summit. Economic growth, we have been talking about it. The summit topect deliver. There is a huge goal between words and deeds. The summits get dismissed as little more than talking shops with good intentions and ideas only to have them die on the altar of pragmatism. This time around, the treasurer reiterated to raise Global Growth by two Percentage Points by 2018. That would add 2 trillion to the Global Economy and create many millions of jobs. There is an intention to crack down on global tax avoidance and corruption. Bether any of that can achieved is another question entirely. We have not started in brisbane. Already there is some skepticism about. We are in a sluggish economy. The growth and recovery is not there. We should make it happen. Possible thats the ground has been prepared here in brisbane. One thing not on the agenda originally is Climate Change. Included after the chinese and the u. S. Signed the emissions deal. The treasurer says that Climate Change will be discussed as part of a broader discussion on energyjust on security. It will be hard to ignore the climate here in brisbane. The mercury is expected to hit a sweltering 42 degrees. Here in london and it does not feel like that. I think you are showing off now. Enjoy the weekend. Covering the g20 in brisbane. An investigator who led a probe into the next two world cups said he will appeal a decision that kept russia and qatar as hosts. He plans to take the pieces of the appeal to the Committee Earlier this month. Other sponsors have expressed concern over the probe. Shares fell 6 . Standard and poor gave the Credit Rating of a double be minus. Financial risk is significant. Been under pressure because of slowing user growth and management turnover. Alibaba planning to raise as much as a billion dollars in its first u. S. Bond sales. That is according to people familiar with the matter. Sales could take place as soon as next week. They will use proceeds to refinance credit. Talkter, we are going to look at the International Power play with tyler brule. Out etiquette in meetings. You can follow both guy and i on twitter. We are asking what do you emailing in meetings . Emailing while presenting Television Programs . Tweeting . Join the conversation. Tell us what you think. We want to show you what is happening with the euro dollar. The market has been position for negative news when it comes to gdp. Eurodollar has rallied, despite the number being negative. Not seeing that today. In some ways, you are. You see the aggregate number coming out for the eurozone. For the market, negative going into this. With a better french number, which pushed the overall aggregate number out. Interesting to see how the next move goes. Are down by 2 10 of 1 . A court has decided to extend the ownerarrest of of the largest wireless carrier. He is charged with money laundering. He was basically appealing his house arrest. Little bit, he woke up feeling pretty good, worth about 7 billion. By the end of the day, his net worth was down by 2 billion. By the end of the month, it was down 5 billion. In the interim, on the afternoon of september the 16th, he was arrested on suspicion of money laundering. Since the middle of september, it has been nationalized. The decision has been to take it away from him. That is how some people have seen it. Nonetheless, he decided not to appeal that earlier this week. He maintains his innocence but decided not to appeal the of the oil company. He has spent two months in this cage. There was a lot of hope that perhaps today, as part of the legal proceeding, he would be. He will remain in house arrest while the case continues. He went to the clink, he did not go to house arrest. He wasested many arrested, many people believe, because he posed a political challenge to president putin. Evtushenkov has never criticized the president. Others thought the company would be better in their control or in the government posco. Governments control. While the company has been taken away, it is not over yet. There are some people saying it should be taken going. Shares are down 90 so far this year. Mts is also listed in moscow. Both of those shares will be probably alongng with the entire russian market. We will continue to keep an eye on this story. On russia. Ep a focus we will do so after the break. Check out this. Worthssian stock market less than apple. Sanctions have been taking their toll. Pretty disturbing chart. We will let you look at it. We will be back in a couple of minutes. Coming him, International Power play. Which nation takes a top spot in the power play. Why it has bumped germany into the second place. We will speak to the magazines sounder. We are looking forward to this conversation. More to talk about. Welcome back. The total largest the two largest economies have slow recovery taking hold in the region. The German Economy narrowly avoided as gdp rose. The French Economy grew a better the next acted 0. 3 . Lifting Global Economic have beenaders arriving in the city of brisbane. Ukraine setting a big scene. David cameron announced legislation intended to stop islamic extremists from returning to britain. The laws would dan and lines that do not provide data on passengers to u. K. Authorities. We have been looking at risks to businesses. We spoke to the ceo of the Security Management company. We believe that fraud is the number one risk. Quickly followed by. There are businesses that are dependent on the value of the ip in their business. Also, straightforward theft. I am going to bring you a click snapshot. Round about 1 10 of 1 lower. You storyill tell gdp. Greece out of recession. 0. 1 growth from the largest economy. That is a bit of a problem. People talk about what is falling off the cliff edge in europe. A look around the euro zone our minds me of crawling through the sahara. Then you see the smallers. It looks like a recovery, and it is not. Me 1. 2459. Ys Going Forward, cutting forecast for the eurodollar next year. Clearly, the falling euro is not the game changer. Thank you. In about 25 minutes from now, it is surveillance with tom keene. What are we looking at . We have a lot going on. Australia, aane, look back. Elizabetho bring you economy. Without question, the number one expert on pollution in china. China looks at northwest to moscow. We will go to hans nichols. You know i am a huge fan of the research on productivity and on emerging markets. You wonder if labour will get a piece of the productivity action. Thank you. Probably the biggest piece of the puzzle. Looking forward to that. The world is obsessed with the use of hard power. The u. S. Has overtaken germany as the country possessing the most soft power. The latest position of Monocle Magazine outlines why america has such a big influence in the world. Joining us now is the magazines editorinchief. I dressed for brisbane. It is raining outside. I am fresh from the west coast. America is known for its use of hard power. It is not that great of a surprise if you think about how many icons come out of the country. You talked about the iphone in your pocket. Summer. This you can look at what governments do. Too often we look at so many countries around the world in the private sector is leading the way. Cap into thest a unconscious. In germany, you probably do not think of a very cool country, but it is, because they won the world cup. You think at what might be in your driveway. China and how the chinese observe germany. Whether it is the electorate or youle in government, if look at the power of germany, so many strong brands come out of the country. There are other things too. Think of food in a broad context. Brands do well. In a world that seems to be ofinated on the military and military action, diplomatic action, how important is soft power versus a world which is accessing about ukraine and what is happening elsewhere in the world. Like to seed action. Hard power is important. It is crucial. We see a lot of countries, australia hosting the g20. They have taken aircraft carriers. It is important. It plays into the heartland of. If you invest in defense, that can play well in terms of national brand. There is a point where soft power becomes real power. You see some sense of leadership. Brazil helped. It is underlined, maybe not by music. 25 years on, are you surprised germany is not wielding more. Nfluence is der whether it number two is not a bad position. There is a momentum where the germans feel it. Can they wield hard power as well . You talked to many germans and they feel they are in that place. Issue, i was talking with mr. Lagerfeld. How do you see germany 25 years after . Many would like to have seen it. Talk to us in terms of the Biggest Surprise that comes out of this. It seems countries lose a couple of places or gain a couple of places. What would it take for someone to fall 10 places . You have seen a drop on the part of turkey. Very much in the news, maybe not playing the way many people would have liked to have seen. A nation which does well, despite many things that are happening at home. Places asok at other well. Thatsia, not somewhere ranks. You have a series of tragic events, which are beyond the control of what happened. Is beyond your control. There is very little you can do as a government at that point. This is a country down on its leadership. Hunting for a tiger. This changes the equation a little bit. How and during Something Like french culture . How easy is it for them to lose that . If this carries on and we are reading books about french how long will the historical contacts continue to support that . Francis peculiar and particular. We all know. It is a place that is underpinned by very strong culture. You can have strange and odd forces. You can have problems with the unions. It touches consumers every day. Dutyfreeu go through and things you want in your christmas tree, there you have a group that is very strong. You look at the power of french cinema. It can carry a strong head of steam for a long period of time. Va va voom tyler is staying with us. Thank you. , the editor in chief at Monocle Magazine. We will be back in a few minutes. You areme back, watching the pulse. Should emailing in meetings be banned . Are if youre not answering your email, you are not busy enough. Putting your device on the , i think you have to be below the table line. Ok if itt is actually is discrete. It send . Essage does that the people are not worthy of your time . It shows that you are responsive, guy. No, but i think you have to choose your moment. There are moments you do see something pop up on your screen that needs a quick answer. It is something people think about. It goes to the point that we are so interconnected the people are expecting you to respond 24 7. Is that a good thing or a bad thing . That column will just be hitting in asia the next few , they have no idea of the volume. You have many other things to do. Im not a travel booking service either. Where should i take my kids in kyoto . You need to give me a little bit more time, more than 36 hours. [laughter] francines father has very interesting views on this. [laughter] it goes back to pressure. Is it cycle . Will the generation addicted to ipads relies that you need more oneonone time with people . I think these things are all cyclical. I think if you look at the media landscape, i was in paris yesterday and they were talking about some of the power and impact of doing things they had not done from a media perspective. Magazines,gaged in but they decided to try outdoor and the power of outdoor in china. We have never heard of these companies before from china. The chair is moving. [laughter] it is interesting. Outside of airports where they know people are traveling, it is important to have significant outdoor space. What do you think about wearables . Why are you asking me that question . [laughter] i have no idea. [laughter] what do you think about them . Companies are about to know so much more about the way you act, think, react to everything. Extending the thing about messages in meetings. Where does it end . What happened to google glass . Thathrilled about the fact that has already dropped out of the headlines. I think that is largely good news that we can get excited about many things and we can jump on these bandwagons. The bigger issue of whether it and itg to be something is speeding a stream to your Insurance Company and other we have notink fully explored the depth of what this means in terms of real data protection. You could walk into a restaurant and the menu would pop up in front of you. Wouldnt that be great . Then you lose that interaction. You lose the interaction with the paper, the small pleasures of holding a menu. Or a magazine. A magazine. Do you think tech is something that is great in many ways, but is something that may hurt culture . For sure. We see this headlong rush by many companies. We talk about digitizing the archive. Yes, we should be able to navigate the archive. Becauseing parts of it it goes on a server is absolutely ridiculous. Physical connection to touching the paper, the smell of something, they trigger something in the recesses of your mind that makes you go for a completely different line of thought in whatever research you are doing. Lets circle back. A lot of this innovation is coming out of the United States. Develops beginning to an issue with Companies Like google and feels it needs to resist Companies Like google. Is that the right way of approaching it . Is it right that europe should protect the culture . How do we balance these things out . I think it is a very good idea. I think it is important that you do have, it does not have to be a voice of opposition, but a subtle voice of reason. Some countries dig their heels and a little bit much. Much. A little bit just because you are a big company that is driving wall street and markets that you should completely go about your business without people ever questioning it from the cultural point of view, it is unproductive. Whether you are in berlin or paris, you think the cranky germans or the grumpy french, i think there is a point from time to time. I dont feel you get the same level of questioning in the u. S. If you do, it is only about security. About my rights as a gun toting libertarian or whatever i am. Thank you so much for a great conversation, tyler. The editorinchief of Monocle Magazine. Looking forward to that. The latest addition. Edition. The first ever, landing ever comet landing hits a snag. Welcome back. You are watching the pulse. The data are significantly better than anticipated in some peoples minds. The euro did bounce a little bit. We faded a little bit. We are down by 0. 1 . For a look at what we are watching, we are joined by Johnson Nichols hans ni chols. Mr. Putin has some warships patrolling international waters. Tensions seem to be pretty tight. It does not seem that this is going to be a conversation about the Global Economy and it may be taken by geopolitical issues. Lets go out of this world. Landings. Talk to us about a lack of sunlight. It is a basic principle when you are landing on a comet. You should know it. It is as easy as parallel parking. Neverland in the shade of a cliff. Then your solar battery will never run dry. They have enough Battery Power for now until tomorrow. They are thinking about relanding, reparking. I know that well. Anybody in london knows it well. That is it for the pulse. Keep it right here on bloomberg tv. Surveillance is up next. Have a great weekend. This is bloomberg surveillance. Britain. 20 meet in further sanctions come front and center. When will north dakota and canada go dark . Phone, we are a connected world. Good morning, everyone. This is bloomberg surveillance. It is friday, friday, i say. We dragged mary childs off the street. She is in for scarlet fu. I just got over the plague. Everyone has either had it, getting it, or going to get it in new york city. Thank you, antibiotics. We thank you Louie Pasteur and others. Putin is playing his